The Playskool Travel-Lite Crib

Transcription

Center for Decision Research
The University of Chicago
November 5, 2002
Abstract: The Playskool Travel-Lite Crib
The Playskool Travel-Lite, a portable crib manufactured by Kolcraft Enterprises and licensed by Hasbro’s
Playskool division, came to market in December 1989, stopped shipping in April 1992, and was recalled in February
1993. The crib’s recall was initiated after three children were killed, in separate incidents, when one of its top rails
collapsed and strangled them. Approximately 11,600 of the cribs were manufactured, and by June 1996, when the
U.S. Consumer Product Safety Commission (CPSC) closed its case, only 2,736 Travel-Lites could be accounted for.
To date, six children have been killed in Playskool Travel-Lite cribs.
This case discusses the design, development, marketing, sale, and recall of the Travel-Lite.
Part A discusses how the Travel-Lite came to market, details the deaths of three infants in the product, and
brings Sanfred Koltun, CEO of Kolcraft, to a point where he must decide how the company will conduct a recall, as
ordered by the CPSC.
Part B details the recall process as it occurred, including negotiations between Kolcraft and the CPSC, and
Kolcraft’s actions in conducting its recall. It also discusses three additional infant deaths that occurred after the
recall.
Part C considers the numerous issues surrounding the succession of the company to Sanfred Koltun’s son
Thomas and details Travel-Lite deaths that occurred during and after the recall. The case ends with Thomas Koltun
facing a major lawsuit, public relations challenges, maneuverings by Hasbro to separate itself from the product’s
liabilities, and the possibility that Travel-Lites are still in use by the public.
This case study is designed for use in business ethics and organizational behavior courses, as well as in
courses treating new product development, brand integrity, governmental regulation, crisis management, succession
management, and business law. The narrative of the case provides material for discussing ethically responsible
corporate policy and practice. Analysis of the decision-making processes at Kolcraft and Hasbro that ultimately
resulted in the tragic deaths provides an opportunity to discuss the many facets of corporate responsibility.
Written by David Zivan, Senior Editor, Chicago magazine. Funded by the James S. Kemper Ethics in Business Grant to the
Graduate School of Business at the University of Chicago, under the direction of Professor Linda Ginzel.
This document, which can be downloaded from http://www.chicagocdr.org, is in the public domain and may be reproduced
without permission. The University of Chicago and the James S. Kemper Foundation would, however, be grateful to know of any
and all uses of this case. A teaching note, for faculty use only, is available by request.
Please write: Professor Linda Ginzel, Graduate School of Business, The University of Chicago, 5807 South Woodlawn Avenue,
Chicago, IL 60637, USA. Or by email: [email protected].
1
November 5, 2002
The Playskool Travel-Lite Crib (A)
Sanfred Koltun sat in his office in the Chicago headquarters of his company, Kolcraft Enterprises, reading a
letter. Addressed to Bernard Greenberg, president of Kolcraft, the February 1, 1993, letter had been passed around to
the company’s handful of top executives. He would get their perspectives on the situation. But Koltun knew that, as
owner and CEO, he would be the one to determine the company’s actions. It had been this way since his father
started the company in 1942.
The three-and-a-half page letter was from Marc J. Schoem, director of the division of corrective actions for
the United States Consumer Product Safety Commission (CPSC). Schoem’s office, his letter explained, was
responsible for making a preliminary determination about “whether a defect is present in a product and, if so,
whether that defect rises to the level of a substantial risk of injury to children.”
“The CPSC has received reports of two infant fatalities resulting from the collapse of ‘Playskool’ brand
portable cribs manufactured and distributed by Kolcraft,” Schoem wrote. “In both cases it appears the infant was
entrapped when the crib collapsed while the infant was in the crib.” Schoem then requested a “full report.” Kolcraft
would have to provide, among other materials, “copies of all test reports, analyses, and evaluations, including
premarket tests and reports of tests and any analyses related to the locking mechanism and/or potential for collapse
of product.” The CPSC also requested copies of all engineering drawings, any consumer or dealer complaints,
lawsuits, assembly instructions in all their forms, and two samples of the Travel-Lite crib. Finally, Schoem noted,
Kolcraft had a “continuing obligation to supplement or correct its ‘full report’” as new information about the product
or incidents related to it became known.1
Schoem closed his letter with the request that Kolcraft respond within ten working days.
1.
Marc Schoem, letter to Bernard Greenberg, 2/1/1993. Linda Ginzel, as independent administrator of the estate of
Daniel Keysar, deceased, and on behalf of Boaz Keysar, Ely Keysar, and Linda Ginzel, next of kin, plaintiff, v. Kolcraft
Enterprises, Inc., a Delaware Corporation, and Hasbro, Inc., a Rhode Island Corporation, defendants, #98L7063, Circuit Court
of Cook County, County Department, Law Division. From appendix, tab 7.
1
History of Kolcraft
Kolcraft Enterprises was started in Chicago in 1942 as a manufacturer of baby pads, a foam product
commonly used in high chairs, playpens, and bassinets. In 1950 Kolcraft began manufacturing mattresses for use in
baby cribs. Sanfred Koltun, the founder’s son, graduated with a bachelor’s degree from the University of Chicago in
1954 and an MBA from the same school in 1955. He then joined the company, which at that time employed about
30 people.2
By the early 1980s, Kolcraft diversified into the manufacture of various juvenile seats, including car seats
and booster seats. Koltun opened a 25,000-square-foot facility in North Carolina making what are generically known
as playpens, a metal and masonite folding device typically measuring 36” by 36” with mesh sides. Children would
nap and play in these common household products. Kolcraft eventually expanded to include operations in
Pennsylvania, Georgia, and California.3 By the late 1980s, the company had hundreds of employees, with
headquarters in Chicago and a separate manufacturing and engineering facility in Bedford Park, Illinois.4 Though
dwarfed by major corporations like Mattel’s Fisher-Price and Hasbro’s Playskool, Kolcraft eventually grew to
become the seventh largest juvenile products manufacturer in the nation, with revenues around $30 million.5
Kolcraft maintained a small executive suite with Sanfred Koltun as CEO. Kolcraft’s flow of information
was informal, with meetings taking place frequently in a centrally located conference room at the headquarters.6
Although the managers of various divisions controlled the day-to-day operations of their projects, Sanfred Koltun
had the final word in all important decisions of the company.
In 1979, Kolcraft hired Edward Johnson, a graduate of a technical high school where he received training in
draft work. Johnson had worked as a design draftsman for a lighting company, served four years in the Air Force,
and worked for seven years at J.E. Industrial Molding as a designer in custom blow molding, a process that made
plastic products with a cushion of air inside. He designed Kolcraft’s first car seat, which was sold in the Sears
retailing chain, and by 1987 he had been named engineering head of Kolcraft. Johnson worked mainly on car seats
and other seat products like high chairs until his first design of a portable crib, in 1989.7
In 1987, Kolcraft hired Bernard Greenberg as a vice president. A graduate of New York University,
Greenberg had worked at Macy’s for six years as a buyer, then spent a number of years with various manufacturers
of juvenile products, eventually serving as president of Century, a juvenile product manufacturer which was a
division of Gerber baby products. Greenberg became president of Kolcraft around 1990.
Development of the Playskool Travel-Lite
In the mid-1980s, the U.S. juvenile product market saw a substantial influx of imported goods, primarily
from Asia, including a new product—portable play yards, or portable cribs as they came to be known. Rectangular
in shape, the traveling cribs often folded into a carrying bag. Sanfred Koltun believed that Kolcraft could
manufacture a similar, better product.
In the first half of 1989, Edward Johnson drew up some preliminary sketches for a portable, collapsible
crib. Johnson’s design featured two hollow plastic sides that would serve as the exterior shell of the crib when it was
folded for transport. The other two sides would be made of mesh supported by two collapsible top rails with a hinge
in the middle. The solid floor would also fold at the center.
That spring, Sanfred Koltun gave the go-ahead to create a mock-up of the portable crib. “His comment
from the very beginning was like it was the best thing he’d ever seen,” Johnson remembered later. “It was unique
2.
3.
4.
5.
p. 83.
6.
7.
Deposition of Sanfred Koltun, 4/19/2000, pp. 6-8.
Deposition of Bernard Greenberg, 9/30/1999, pp. 8, 20.
Illinois Manufacturers Directory, 1988-92.
E. Marla Felcher, It’s No Accident: How Corporations Sell Dangerous Baby Products, Common Courage Press, 2001,
Deposition of Edward Johnson, 5/13/1999, p. 14.
Johnson, pp. 3-9, 29.
2
because there was nothing out there with a carrying case. Nothing that was that structurally sound. Nothing that
looked as nice as that.”8 Johnson’s painted wood model of the crib was well-received by Kolcraft’s marketing
department, and the company decided to try to get the portable crib ready for the annual Juvenile Products
Manufacturers Association (JPMA) trade show, scheduled for mid-September in Dallas.
Initial prototype models of the crib were heavier than Johnson had hoped—close to 19 pounds, as opposed
to the 10 or 11 pounds he had originally planned. Nevertheless, the company’s optimism for the product continued.
According to Johnson, the engineering department generated an “unbelievably thick” file on the Travel-Lite while
trying to make the product achieve the portability that had been a major selling point of its competitors.9
A Travel-Lite prototype was made and sat in the break room across from Johnson’s office in Bedford Park.
Soon Johnson found himself demonstrating the crib to other Kolcraft employees. “We constantly were taking this
thing down and putting it back up, kicking it around, because it was a unique product and everybody was … excited
about it,” Johnson remembered. “Whenever someone walked into the room, they’d come in to me and say, ‘what is
this?’ and I’d have to go through and explain it. And every time they asked, I’d tear it down and put it back up again.
This thing [was] going up and down all the time.”10
A prototype model of the portable crib received a generally favorable reception from retail buyers at Sears,
K-Mart, JC Penney, Wal-Mart, Montgomery Ward, Service Merchandise, and Target. Several buyers noted that they
would like to see the crib be a little lighter. Some also noted that they had difficulty turning the crib’s locking
mechanism, which consisted of round plastic knobs or dials located at the end of each top rail. “Some of the buyers
told us they just could not turn the lock,” said Greenberg, who visited the engineering offices once a week to check
on the project’s progress. “And [Johnson] kept on working on it.”11
The final design featured a nub on the outside portion of the dial that would slide into an indent on the
inside portion. Once the crib was standing up, users would turn the knobs to the “lock” position (eventually
designated by decals), and then hear a small “click” (Exhibit 1). “When we put it back to the buyers, they liked it a
lot,” Greenberg said. “They thought it was a very good idea.”12
The crib would be ready for the trade show in Dallas.
Licensing the Travel-Lite
Sanfred Koltun believed that affiliating with a recognized brand name would be beneficial for Kolcraft. “I
thought in terms of customers,” he said. “I wanted to get [our product] on the floor of juvenile departments in retail
stores.”13 In 1989, as Bernard Greenberg would later put it, Sanfred Koltun “went after the Playskool name,” and by
that summer Koltun had negotiated a licensing deal with Hasbro.14 Koltun hired Ernst Kaufmann, a 32-year veteran
of Sears, to handle the merchandising of the new line, which Kolcraft would license under the Playskool brand
name.
Playskool, well known in the juvenile products market for its reputation as a maker of high quality toys,
was a property of the Hasbro company. Founded in the 1920s by Polish immigrant Henry Hassenfeld and publicly
traded since 1968, Hasbro was in the 1980s one of the fastest growing companies in the nation, with successful
brands such as Raggedy Ann and G.I. Joe, and revenues surpassing $2 billion. In 1983, Hasbro had hired John
Gildea to be its director of licensing. Gildea had been employed by the owners of Hanna Barbera, where he had
negotiated licensing contracts for such properties as the Flintstones, Scooby Doo, and Huckleberry Hound. Prior to
1983, licensing had not been a separate department at Hasbro, and top management at the company had directed the
new department to find high-quality manufacturing partners who would uphold Playskool’s reputation in the
8.
9.
10.
11.
12.
13.
14.
Johnson, pp. 31-32.
Johnson, p. 20.
Johnson, pp. 14-15.
Greenberg, p. 82.
Greenberg, p. 85.
S. Koltun, pp. 73-75.
Greenberg, p. 26.
3
marketplace. Through the mid-1980s, Gildea hired account executives to handle such properties as G.I. Joe, My
Little Pony, and Mr. Potato Head.
By the end of the decade, Hasbro had begun licensing the Playskool name—a brand associated, as Gildea
put it, with “quality, fun products.”15 In an interview with Children’s Business,16 Gildea outlined the emerging
benefits of the company’s licensing business:
The non-toy products are Playskool line extensions that we don’t happen to make. Our
strategy is twofold. We gain incremental exposure of the Playskool name, [creating] brand
awareness at a very early age that will pay dividends down the line. Secondly, and not
insignificantly, it brings income. Licensing allows us to concentrate on our core business and also
take advantage of the corporate name in appropriate products.
Both benefits looked relatively easy to achieve, and may have seemed necessary, as one of Hasbro’s main
competitors, Fisher-Price, had already begun making products outside its traditional lines.17
In the original agreement, Kolcraft would manufacture and distribute mattresses, playpens, and car seats
with Hasbro’s Playskool name attached. The agreement stipulated, among other provisions, that:
[T]he licensee shall, prior to the date of the first distribution of the licensed articles,
submit to the licensor a test plan which lists all the applicable acts and standards and contains a
certification by the licensee that no other acts or standards apply to the licensed articles. … Test
plan shall describe in detail the procedures used to test the licensed articles, and licensee shall
submit certificates in writing that the licensed articles conform to the applicable acts and
standards. Upon request by the licensor, licensee shall provide licensor with specific test data or
laboratory reports.18
Kaufmann helped with the final terms of the licensing agreement, and came up with one amendment:
adding the new portable crib to the deal.19 “When you develop your company into new products, the competition is
way ahead of you,” said Greenberg. “If you develop a product that is similar to the competition, especially in price,
you need something to put on it to give more flavor to it, so to speak.”20
Going to the Show
Kolcraft’s display at the JPMA trade show in Dallas featured a separate area for its Playskool products,
staffed by Kaufmann. The Travel-Lite received a warm reception, and a press release by the JPMA, dated
September 15, 1989, named the Travel-Lite one of the top new products at the trade show:
At a press conference today, the Juvenile Products Manufacturers Association (JPMA)
announced the winners of the “Ten Most Innovative Products Contest.”
A panel of independent judges … were instructed to judge on: creativity, originality,
function, convenience, safety, innovative design, fashion, style, and overall appearance and use of
the product.
Later, the crib even got some national press attention in the “What’s New in Design” section of the
December 4, 1989, edition of Adweek magazine (Exhibit 2).
15.
16.
61.
17.
18.
19.
20.
Deposition of John Gildea, 8/26/1999, p. 11.
Gregory J. Colman, “What’s Playskool’s Name Doing on a Pair of Sneakers?,” Children’s Business, February 1991, p.
Details of this expansion also included in Children’s Business, February 1991.
Gildea, pp. 54-55.
Deposition of Ernst Kaufmann, 6/29/1999, p. 16.
Greenberg, p. 27.
4
Final Preparations
On September 28, 1989, Hasbro’s David Schwartz, who handled the Kolcraft account for the company,
wrote a letter to Ernst Kaufmann, reminding him of Kolcraft’s obligations under the licensing agreement. “Pursuant
to the terms of the contract between Hasbro and Kolcraft Enterprises, please be aware that Kolcraft must adhere to
the terms set forth in Paragraph 7 (quality of merchandise), stating that: ‘The licensee warrants that the licensed
articles will be designed, produced, sold, and distributed in accordance with all applicable U.S. laws.’”21 Schwartz
then specifically asked for documents he had not yet received: “I would also request test plans and results for the
Playskool travel crib … when they have been obtained.”22 While Hasbro had its own quality assurance department,
it did not perform tests on the Travel-Lite.23
On December 1, 1989, Kaufmann answered Schwartz with a letter, noting various government and industry
testing standards that had been applied to the other juvenile products about to come to market under the Playskool
name. For the portable crib, he noted only that the product would come with a one-year limited warranty. “My
intention was to show that we had a quality product,” Kaufmann said later. “[One] that we were willing to put a
warranty behind.”24
In subsequent conversations with Kaufmann, Schwartz again requested test plans for the Travel-Lite.25
Kaufmann answered with a December 21, 1989, letter,26 which in its entirety read as follows:
Dear Mr. Schwartz:
Please be advised that there are no government or industry test standards applicable to the
Playskool portable crib.
We have therefore taken all reasonable measures to assure that this portable crib is an
acceptable consumer product.
Very truly yours,
[signed] Ernst Kaufmann
Schwartz filed the letter.
Going to Market
Kolcraft began producing and shipping the Travel-Lite in January 1990. Both the crib and its packaging
featured prominent placement of the Playskool name, and it was available in retail chains such as Toys ’R’ Us, KMart, JC Penney, and Wal-Mart. An instruction sheet for setting up the crib was affixed to the floor of the crib,
underneath the mattress—“a standard production step,” Johnson noted. “It’s in the specifications for [conventional]
play yards. … All the other play yards have them.”27
Sanfred Koltun was by now a proud grandfather. On family visits, his grandson would spend time in a
Travel-Lite. “I was very happy with it,” Koltun said.28
In June 1991, Edward Johnson received a patent for the Travel-Lite design. His petition noted that “the
present invention relates to collapsible or foldable structures; and more particularly, to a collapsible structure
21.
22.
23.
24.
25.
26.
27.
28.
Deposition of Laura Millhollin, 3/29/2000, p. 47.
Kaufmann, p. 74.
Deposition of Malcolm Denniss, 8/27/1999, pp. 18-22.
Kaufmann, p. 76.
Deposition of David Schwartz, 3/17/2000, pp. 62-66.
From appendix to #98L7063, tab 17.
Johnson, p. 94.
S. Koltun, p. 61.
5
suitable for use as a portable play yard.” Other play yards, the patent application contended, were difficult to fold,
whereas Johnson’s design for the Travel-Lite was “easy to fold and transport.”29
Sanfred Koltun would later attribute the poor sales of the Travel-Lite to the fact that the crib was more
expensive than similar imported items, causing discount retailers like K-Mart and Wal-Mart to shy away from the
product. The design team felt that the product had simply become too heavy. “As far as the buyers go, [the] unit
[was] too heavy,” Johnson said. “I don’t think it was the consumer. The buyers kept asking for more and more—
more padding, things like that. And eventually, enough buyers said, ‘no.’”30
Kolcraft ended up selling only about 11,600 of the cribs, models 77101 and 77103, and shipments stopped
in April 1992.31
The First Deaths
On July 3, 1991, an 11-month-old boy in California died of strangulation while in a Travel-Lite crib.32 The
child’s neck was caught in the “V” created when the crib’s top rails collapsed (Exhibit 3). The CPSC investigated
the incident, and produced a report by the end of the year.
That spring, the report was mailed to Hasbro, which forwarded it to Kolcraft. In June 1992, Kolcraft
responded with a letter to the CPSC, which stated in part:
The CPSC report on the July 3, 1991 incident involving a small child notes that the travel
crib is subject to the voluntary standards of the juvenile products manufacturing industry. We note
that there is no such standard applicable to travel cribs. The ASTM standard for play yards, ASTM
F 406 does not apply to this product, which is a wholly different structural entity. Nor does the
CPSC standard for non-full-size cribs, 16 CFR Part 1509, apply to travel cribs of this design.
The letter also noted that nothing in the report “suggests at this point that the Travel-Lite portable crib is
defective in any way or presents a substantial hazard.”33
On November 30, 1992, a nine-month-old girl in Arkansas died when her Travel-Lite collapsed, strangling
her in the “V.” A ten-month-old girl in California was killed in the same manner in another Travel-Lite on January
5, 1993.
The CPSC had only heard about two of the deaths when Marc J. Schoem wrote his February 1, 1993, letter
to Kolcraft, requesting a full report on the Travel-Lite. Sanfred Koltun was shocked at the news. “I was appalled
when I heard about the deaths,” he said. “I just couldn’t believe people were so careless.”34
29.
30.
31.
32.
33.
34.
Report of Shelly Waters Deppa, Safety Behavior Analysis, Inc. 11/16/2000, p. 3.
Johnson, pp. 43-44.
Jonathan Eig, “How Danny Died,” Chicago magazine, November 1998.
Mitch Lipka, “Deaths of six babies expose fatal flaws of system,” Sun-Sentinel, South Florida, November 28-30, 1999.
Mitch Lipka, ibid.
S. Koltun, pp. 62-63.
6
Exhibit 1
The Playskool Travel-Lite crib with view of two side knobs
7
Exhibit 2
The Playskool Travel-Lite crib in Adweek magazine
8
Exhibit 3
The Playskool Travel-Lite crib in collapsed position
9
November 5, 2002
The Playskool Travel-Lite Crib (B)
Starting the Recall
The Travel-Lite had been off store shelves for almost a year when Kolcraft received the February 1, 1993,
letter from the U.S. Consumer Product Safety Commission (CPSC). And although the crib carried a limited one-year
warranty, the product had not included a mail-in warranty registration card for consumers. By February 1993, the
earliest users of the crib would have long outgrown it, and in many cases the original purchasers would have
discarded, stored, sold, or given away their cribs.
Sanfred Koltun met with Bernard Greenberg and John Staas, an attorney and Kolcraft’s vice president of
operations, to discuss the situation. Kolcraft retained a law firm in Washington, D.C., and on February 12 drafted a
response to the CPSC. In it they proposed notification procedures, including contacting retailers with a letter and a
poster informing them of a potential problem with the Travel-Lite, and providing a toll free number for consumers to
call. A copy of the poster Kolcraft designed for display in retail locations was passed to Hasbro, and on February 18,
staff at Hasbro approved the poster.1 On February 19, a Friday, Kolcraft sent retailers a letter and an accompanying
8-1/2” x 11” poster, which included a drawing of the Travel-Lite.
Also on February 19, Kolcraft’s lawyers in Washington received notice that the compliance staff at the
CPSC had made a preliminary determination that the Playskool Travel-Lite crib presented “a substantial risk of
injury to children as defined by section 15 (a) of the Federal Hazardous Substances Act (FHSA), 15 U.S.C. § 2064
(a). Specifically, there have been three reports to the Commission of infant fatalities resulting from the product
folding up during use.”2 On February 22, 1993, the CPSC received from Kolcraft a copy of the letter and poster the
company had mailed to retailers the previous Friday. On February 24, 1993, William J. Moore, Jr., an attorney in the
office of compliance and enforcement of the CPSC, wrote a letter to Kolcraft’s attorneys in Washington, D.C. His
letter stated, in part:
1.
Deposition of Malcolm Denniss, 8/27/1999, p. 64.
2.
Linda Ginzel, as independent administrator of the estate of Daniel Keysar, deceased, and on behalf of Boaz Keysar, Ely
Keysar, and Linda Ginzel, next of kin, plaintiff, v. Kolcraft Enterprises, Inc., a Delaware Corporation, and Hasbro, Inc., a Rhode
Island Corporation, defendants, #98L7063, Circuit Court of Cook County, County Department, Law Division. From appendix,
tab 7.
1
We take serious exception with your proposal to print the pediatrician poster in black and
white. The poster will be competing with many other pieces of information. … The staff was very
troubled to learn that the retailer letter and accompanying poster you provided to us on Monday,
February 22, 1993, had already been sent to the retailers the previous Friday. The staff had been
asking to review the proposed retailer notice for several days. Your February 12 letter promised to
provide these documents to us by February 16. We stood willing and able to give quick guidance
for producing effective notice documents. …
The 8-1/2 x 11 inch, black and white, thin stock “poster” sent to retailers had many
serious shortcomings, in our view. It did not even have the Playskool name on the crib.
Moore added that his staff “wishes to work with Kolcraft to make this an effective … recall and to prevent further
tragedy.”3
In a conference call on March 1, Kolcraft’s attorneys in Washington tried to reassure the CPSC that
Kolcraft and their firm were responding quickly and responsibly. Kolcraft had by then agreed to send a notice to
approximately 26,000 pediatricians on a list maintained by the American Academy of Pediatrics. In addition, it
would send a revised letter to Sears and to smaller retailers. The JC Penney’s chain would be able to notify its
catalog customers directly from its database. Kolcraft’s attorneys expressed concern with the tone of Moore’s letter
and asked that it be purged from the case file, a suggestion that the CPSC rejected.4
After confidential negotiations between Kolcraft attorneys and the CPSC, the CPSC on March 10 issued a
press release announcing the product recall (Exhibit 1). Hasbro was not involved.
Six weeks after its request for a full report, the CPSC was still attempting to acquire testing data on the
Travel-Lite and status reports on the progression of the recall.5 On March 19, 1993, John Staas wrote a memo to
Kolcraft’s file,6 with the subject line, “Testing information requested by CPSC.” It read in part:
Using the ASTM play yard standard as a model Kolcraft measured and maintained the
following performance features on the Travel-Lite crib:
1.
2.
3.
4.
5.
6.
7.
8.
Caps, sleeves, etc. secured to stay on with 15 lbf force or more.
Uniformly spaced components.
Side height of 20 inches.
Side strength and deflection of top rails and supporting methods to withstand 50 lbf static
load.
Floor strength to withstand 50 cycle 30 ft. load.
Holes sized to avoid finger entrapment.
Mesh openings to avoid finger and toe entrapment and snaring of buttons.
Twelve-gauge vinyl used on the top rails.
Staas mentioned reaching compliance with regulations on sharp points and edges, and flame-retardant
standards, and added that:
Kolcraft designers conducted use and abuse tests on these cribs, consisting of repeated
cycles of leaning, pushing, sitting on and throwing the crib, and turning it on its sides. Kolcraft
also tested the folding mechanism to determine if it could be inadvertently folded or lowered by a
child while the crib was in use. Kolcraft used CPSC 16 CFR § 1500.53 (e) (3) as its standard to
test the folding mechanisms.
3.
4.
5.
6.
From telephone notes in appendix to #98L7063, tab 7.
March 16, 1993, documents from appendix to #98L7063, tab 7.
2
CPSC use and abuse standard 16 CFR § 1500.53 (e) (3) prescribes a standard of 4 inchpound torque to measure the susceptibility of a product to the twisting motion of a child 36 to 96
months of age. The Travel-Lite top rails were designed and measured to require four times the
force of the CPSC regulation. Kolcraft’s measurements using a torque wrench indicated that 15-20
inch-pounds was approximately the range needed to activate the folding mechanism.
Kolcraft was able to produce no records on the testing of such a twisting motion. Later, Edward Johnson
said he could not recall which of the tests his department performed had received written notations, and which had
been informal.7 In addition to simply turning the dials at either end of the crib, as intended, the crib could also fold
closed if the collapsible top rails were turned firmly enough (i.e. 15-20 inch-pounds, as noted by Kolcraft) to
dislodge the nub holding them in place.
On July 12, 1995, a ten-month-old boy in Indianapolis was strangled in the “V” of his collapsed TravelLite. He was the fourth known victim of the crib.
By June 1996, of the 11,600 sold, 2,736 Travel-Lites could be accounted for. Noting that the returns had
stopped, and that there had been no recent injury or death reports, the CPSC closed its case. The status of 76 percent
of the cribs remained unknown.8
After the Recall
On May 12, 1998, during naptime at his childcare provider, 16-month-old Danny Keysar was found
unconscious in the “V” of a Travel-Lite. He was rushed to the emergency room but could not be revived. He was the
fifth reported death in a Travel-Lite (Exhibit 2).
On August 19, 1998, a ten-month-old New Jersey boy was found dead, strangled in the “V” of his TravelLite. He was the sixth victim (Exhibit 3).
7.
8.
Deposition of Edward Johnson, 5/13/1999, pp. 20-26.
3
Exhibit 1
The CPSC press release recalling the Playskool Travel-Lite crib
4
Exhibit 2
The CPSC press release following the fifth reported death in the Playskool Travel-Lite crib
5
Exhibit 2
(continued)
6
Exhibit 3
The CPSC press release following the sixth reported death in the Playskool Travel-Lite crib
7
Exhibit 3
(continued)
8
Exhibit 3
(continued)
9
November 5, 2002
The Playskool Travel-Lite Crib (C)
In the early 1990s, Thomas Koltun was being groomed to take over Kolcraft Enterprises, his father’s
Chicago-based company. A manufacturer of juvenile products, Kolcraft had been started by Thomas’ grandfather in
1942, and had grown to become the seventh largest company in the industry, with several hundred employees and
annual revenues above $30 million.1 After completing his MBA at the Kellogg School of Management at
Northwestern University, Thomas had worked for three years in New York as a product manager with ColgatePalmolive. He joined Kolcraft in 1990 as director of marketing, and in 1994 was named vice president of marketing.
When Koltun joined the company, his father Sanfred, CEO of Kolcraft, had recently entered into a
licensing agreement with Rhode Island-based Hasbro, which would allow Kolcraft the use of Hasbro’s Playskool
brand name. Under the agreement, Kolcraft would manufacture and distribute mattresses, playpens, car seats, and a
new product, a portable crib, which came to be called the Playskool Travel-Lite.
Kolcraft had initially been optimistic about the crib, introduced in January 1990. The company believed
that the well-known Playskool name would bring consumer attention to the product. They also believed that the
portability of the crib—it could fit into the trunk of a car—would provide a useful solution in various situations
parents could encounter. But the crib did not sell well, and by April 1992, when it stopped shipping, only about
11,600 of the cribs, models 77101 and 77103, had been sold.
In March 1993, the Travel-Lite was recalled by the Consumer Product Safety Commission (CPSC). Three
infants had been strangled in the cribs when its top rails collapsed, and the agency determined that the crib posed “a
substantial risk of injury to children as defined by section 15 (a) of the Federal Hazardous Substances Act (FHSA),
15 U.S.C. § 2064 (a).”2 Kolcraft conducted a recall by sending posters to pediatricians and retailers, and the CPSC
issued press releases to the media. The company offered a $60 bounty to consumers who returned the cribs, which
had been sold at retail usually for $89.
1.
E. Marla Felcher, It’s No Accident: How Corporations Sell Dangerous Baby Products, Common Courage Press, 2001,
p. 83.
Linda Ginzel, as independent administrator of the estate of Daniel Keysar, deceased, and on behalf of Boaz Keysar, Ely
2.
Keysar, and Linda Ginzel, next of kin, plaintiff, v. Kolcraft Enterprises, Inc., a Delaware Corporation, and Hasbro, Inc., a Rhode
Island Corporation, defendants, #98L7063, Circuit Court of Cook County, County Department, Law Division. From appendix,
tab 7.
1
Thomas Koltun had assisted with the company’s trade catalog presentation of the Travel-Lite in 1991, but
had otherwise not been much involved in its marketing or licensing. He believed that the failure of the Travel-Lite in
the marketplace arose from strong competition from other manufacturers’ cribs, which were several pounds lighter.
Regardless, by the time the decision came to stop making the Travel-Lite, he was already looking past the product
toward the company’s future. “I was involved somewhat,” he put it simply. “The product wasn’t selling, so it was
time to move on to another product.”3
Further Travel-Lite History
On July 12, 1995, while the recall of the Travel-Lite was still active, a ten-month-old boy in Indianapolis
was strangled in the “V” of his collapsed Travel-Lite. He was the fourth known victim of the crib.
By June 1996, of the 11,600 sold, 2,736 Travel-Lites could be accounted for. Noting that the returns had
stopped, and that there had been no recent injury or death reports, the CPSC closed its case. The status of 76 percent
of the cribs remained unknown.4
Kids In Danger—And a Lawsuit
In mid-1995, a Travel-Lite crib found its way into a childcare home in Chicago—the third owner of that
particular Travel-Lite. The provider set up, used, and took down the crib each day she was open for business, from
the time she received it until May 1998. During naptime on May 12, 1998, 16-month-old Danny Keysar was found
unconscious in the “V” of his Travel-Lite. He was rushed to the emergency room but could not be revived. He was
the fifth reported death in a Travel-Lite.
Danny Keysar was the son of Linda Ginzel and Boaz Keysar, both professors at the University of Chicago.
At first, Danny’s death seemed to his parents to be a freak accident, a cruel tragedy with no explanation. But through
news reports and the investigations of friends, Ginzel and Keysar learned that four children had previously been
killed in Travel-Lite cribs. They also learned that the crib had been recalled five years earlier.
Ginzel and Keysar felt they had to take action, and created a nonprofit organization, Kids In Danger (KID),
whose mission would be to promote the development of safer children’s products, advocate for legislative and
regulatory strategy for children’s product safety, and educate the public, especially parents and caregivers, about
dangerous children’s products. The organization started a Web site, www.KidsInDanger.org, and their efforts to
bring the tragedy into the open resulted in substantial press attention.
On May 14, 1998, Thomas Koltun—now president of Kolcraft—drafted his company’s public response to
the death of Danny Keysar, noting that he was “deeply saddened” by the tragedy. Kolcraft, he wrote, had “always
been concerned with the safety of children.”5
Later that month, Koltun received a phone call from Malcolm Denniss,6 a Hasbro executive who has been
called the company’s “safety czar.” Though the licensing agreement was no longer in effect, Kolcraft and Hasbro
still communicated on matters related to the Travel-Lite. Denniss inquired about Kolcraft’s activities in relation to
the recent events, and Koltun described the press release he was drafting, with help from a public relations firm.
Koltun agreed that he would keep Denniss informed of Kolcraft’s actions.7
On June 18, 1998—the same day the CPSC issued a press release headlined, “CPSC Urges Search for
Previously Recalled Portable Cribs and Play Yards”—Linda Ginzel and Boaz Keysar filed suit against Kolcraft and
Hasbro, seeking damages for their negligence in bringing the Travel-Lite to market. The suit alleged that not only
was the product unreasonably dangerous, but that Kolcraft and Hasbro had failed to properly warn the public about
its danger. Hasbro was also responsible, Ginzel and Keysar contended, because by receiving licensing fees and
3.
4.
5.
6.
7.
Deposition of Thomas Koltun, 5/31/2000, p. 8.
T. Koltun, p. 56.
Deposition of Malcolm Denniss, 8/27/1999, pp. 45-47.
Denniss, pp. 47-48.
2
allowing its Playskool brand name to be used prominently on the product, it was, to the public, the “apparent
manufacturer” of the product.8
News of the lawsuit was featured on the Reuters and UPI newswires, and received national press coverage.
The Chicago Tribune ran a short feature story, including a photo of the Travel-Lite that had killed Danny Keysar,
shown in the collapsed position by Dan Webb, one of the plaintiff’s co-counsels and a former U.S. attorney.9
Hasbro filed a motion to have itself removed from the lawsuit, contending that the responsibility was solely
Kolcraft’s, and referred calls regarding the Travel-Lite case to Kolcraft.10
On August 19, 1998, a ten-month-old New Jersey boy was found dead, strangled in the “V” of his TravelLite. He was the sixth victim.
8.
9.
10.
Case materials from #98L7063.
Jon Bigness, “Suit filed over faulty playpen,” Chicago Tribune, June 19, 1998.
Mitch Lipka, ibid.
3
Acknowledgements
The author wishes to thank a number of individuals who gave generously of their time and expertise during
the creation of this case.
Numerous faculty members, Ph.D. candidates, and MBA students from the Graduate School of Business at
the University of Chicago attended several brown bag seminars to critique drafts of the case study. Their input was
extremely helpful, as was the help of various experts from around the nation. I thank all those listed here and
apologize to those whose names do not appear: Robert Adler, Holly Burt, Jonathan Eig, Howard Haas, Josh
Klayman, Richard Larrick, Harold J. Leavitt, Carmen Marti, Cade Massey, David Messick, Sharon Peck, Megan
Rostan, Caroline Schoenberger, George Wu, and Jeff Zivan.
Mary Abowd provided extensive research and expert fact-checking on the entire case, Patricia LaMalfa
served as a tireless editor and proofreader, and Abhijit Bhalla helped to create the final version of the document.
Attorneys Stephen Senderowitz, Bradford Springer, Patrick Stanton, and Bryan Sup of Schwartz, Cooper,
Greenberger & Krauss generously provided expert legal advice.
Marla Felcher’s It’s No Accident: How Corporations Sell Dangerous Baby Products is a tour de force of
investigative reporting in the area of juvenile product safety, and her work was a valuable resource and an
inspiration.
Tom Hellie, executive director of the Kemper Foundation, not only helped put this case in the public
domain, but also provided insight and encouragement.
Finally, my heartfelt thanks to Linda Ginzel and Boaz Keysar, who have shown great patience during the
case’s composition—and more courage than any of us should ever have to muster.
4

The Playskool Travel-Lite Crib

Transcription

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